Electricity project revision not affected issuers

JAKARTA. Government has revised down the target on electricity project from 35,000 megawatt (MW) to 19,763MW. However, this has not become the negative sentiment for the participants of the projects.

For an example, PT Dian Swastatika Sentosa Tbk (DSSA). “We did not put the figure of 35,000MW as the basis for estimating our income projection,” said Director and Corporate Secretary of DSSA Hermawan Tarjono.

Furthermore, the figure of 35,000 was too high, and the figure can be shared to a number of participants in electricity projects. “Thus, changes in the government's plan does not automatically change the projected income, both revenues from sales of coal and electricity sales," said Herman.

Currently, the power plant projects of DSSA already entered the stage of financial close equivalent to the total capacity of 600 MW that consist of three projects, namely IPP Sumsel-5 with a capacity of 300 MW, Kendari IPP-3 with a capacity of 100 MW and IPP Kalteng-1 with a capacity of 200 MW.

In addition, the DSSA is preparing to operate IPP Sumsel-5 with a capacity of 2 x 150 MW IPP, as well as to develop the project of Kendari-3 with a capacity of 2 x 50 MW with an investment of US$ 200 million and IPP Kalteng-1 with a capacity of 2 x 100 MW.

The issuer is still optimistic that electricity business has positive prospect. Indonesia economy is assumed to grow around 5%-6% per year, while the demand for electricity grows by 7%-9& per year.

Therefore, despite of the revision, Indonesia still need new power plants with capacities of more than 19,763 MW to sustain long-term economic growth. "The business of electricity is our long term business. Hence, the revised power project target will not affect our business plan," said Hermawan.

UNTR Projects

Similarly, PT United Tractors Tbk (UNTR). The issuer has not seen significant impact of the revision, so as with the other ongoing negotiations.

Because, the figure of 19,753MW is the number of the power plants that have entered the financial closing stage. Meanwhile, UNTR does not have new negotiation, except for the project of Tanjung Jati steam power plant with a capacity of 2x1.000 MW. The project is targeted to enter the financial closing in December.

UNTR is also developing a power plant with a capacity of 2x15MW through its subsidiary PT Pamapersada Nusantara, in order to support some mining projects in Kalimantan. “We do not have other power plant projects,” said Corporate Secretary of UNTR Sara K Loebis.

President Director of PT PP Tbk (PTPP) Tumiyana also said that commitments for the projects for the 19,573MW have been reached. Some projects even have been under construction. “The projects are still on,” Tumiyana said.

PTPP even wants to have private power plant through its subsidiary, namely PT PP Energi. “The power plant is targeted to generate a 4,000MW of electricity by the next four years”, Tumiyana said.

(MUHAMMAD FARID/Translator)